Millions of people enrolled on health insurance exchanges created by the Patient Protection and Affordable Care Act are missing out on subsidies available to help them cover the cost of their plans.
An analysis by Avalere, a health care consulting firm, found that 2.2 million exchange enrollees are not receiving cost-sharing reductions (CSRs) despite having incomes that qualify them for the subsidy. That amounts to 27 percent of the 8.1 million enrollees whose income falls between 100 percent and 250 percent of the federal poverty level and who are thus eligible for CSRs. Those with higher incomes are often eligible for tax credits to help them finance their coverage.
People are missing out on CSRs because they signed up for plans that don't qualify for the subsidies. CSRs are directed to those who enroll in sliver level plans, while many of those who are forgoing CSRs are likely enrolling in low-premium bronze level plans.
Avalere suggests that consumers who are picking plans to avoid high premiums are unaware that they could reduce their overall out-of-pocket costs by signing up for a higher premium plan that is eligible for CSR support.
“Consumers are picking plans on exchanges based on premiums, rather than out-of-pocket costs,” said Avalere CEO Dan Mendelson. “As a result, some patients may be paying more than they need to for care. While cost-sharing reductions can help reduce what patients pay when they visit a doctor or hospital, some consumers may be unaware of the potential benefits.”
A recent study by the Congressional Budget Office suggests that 3 million consumers will continue to forgo CSRs by signing up for low-premium plans.
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